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Passengers 'seek cheaper options'

Transport operator National Express has said the tough economic climate was encouraging passengers to seek cheaper methods of travel as it laid out ambitions to grow its UK bus business.

The group said it planned to add 120 new buses to its West Midlands fleet this year and draw in more customers with a new marketing campaign, as there was evidence the UK recession had encouraged passengers to seek "more cost effective" modes of transport.

Elsewhere, the company said it would add routes to its coach businesses and draw in customers with new special offer fares - in line with its successful £9 go anywhere deal which expires on Thursday - and that there were future franchise opportunities approaching for its rail arm.

The positive outlook came as the group posted a 26% hike in pre-tax profits to £95.5 million in the six months to June 30 after a 6% increase in revenues to £1.1 billion.

National Express said the bus marketing campaign would highlight the costs of running a car versus the cost of bus travel.

The company claims that on some major routes leaving a car at home and taking the bus could save a customer £2,500 a year.

The campaign comes at a time when consumer spending power is being squeezed by high inflation - including soaring prices at the petrol pumps.

The company has been rolling out a margin-improvement programme at its bus division, including an overhaul of ticket prices. Cash single fares remained unchanged, but the pricing of travelcards - accounting for 50% of the division's revenues - increased in order to better match journey demand with supply.